Retail Intelligence

Some apparel companies approach supply chain transparency from a “box-ticking” perspective because they’re scared of what they might find if they take a harder look, says Kathmandu’s corporate social responsibility manager Gary Shaw.

In June, Kathmandu became the first company in the Southern Hemisphere to achieve

“Responsible sourcing can often be misunderstood as an external obligation, some kind of duty that we have to do or should do, rather than a reflection of the company’s values,” Shaw says.

He explains that rigorously maintaining ethical sourcing should be a natural and logical response to a company’s key values, and not something to shy away from in favour of a “box-ticking” approach that prioritises protecting the brand.

Asked what Kathmandu may have had to be concerned about in its supply chain, Shaw says no company with an international supply chain is perfect.

He says the issues Kathmandu found in its supply chain were not unusual for a company with an international supply chain and were in line with general expectations. They included things like breakdowns in health and safety procedures over time, workers doing more overtime than they should, and fire escapes that hadn’t been updated.

As part of its new approach to protecting and enhancing the human rights of workers in its global supply chain, Kathmandu has introduced the use of Chinese social media platform WeChat as a grievance mechanism.

“You can stick a health and safety poster on the wall with an English email on it saying ‘If you’ve got any problems, get in touch’… but most workers don’t speak English or use email.”

In order to lower the barriers for factory workers to report grievances and give feedback, Kathmandu has created a QR code for them to scan with their phones which will connect them with the company’s WeChat account. A translator then interprets their words for Shaw and others to assess.

Shaw says the initial feedback was “pretty standard” – questions about contracts, whether various factory procedures are normal – but others have asked, “Why are you going this extra step?”

A few months earlier in the year, Kathmandu collaborated with five competitors who’d been working with the same Chinese factory to bring about “immediate transparency” in a case where the factory had been carrying out unauthorized subcontracting.

Unauthorised subcontracting is a widespread issue in international apparel manufacturing. It’s problematic because it effectively sends the garments being worked on “underground” and out of the visibility of the company that’s contracted the work. Factories which take on unauthorised subcontracting typically operate under less stringent ethical conditions and may not comply with legal labour standards.

Kathmandu was alerted to this situation via a grievance lodged through its WeChat system.

“For us, that’s the system working,” Shaw says.

The six companies affected sent a combined letter of concern to the factory in question, and worked with its management to find out why the unauthorised subcontracting had happened. An immediate audit was also implemented.

“It’s not about looking for perfection, just transparency,” Shaw says. “When you look at the many and varied human rights challenges around the world, no one company can address them on their own.”

He speaks of a broader culture in apparel where companies avoid examining their supply chains for fear of finding out bad news.

“So many corporations have their head in the sand, [with an attitude of] ‘We just want to protect our brand and tick that box.’”

As for consumers, Shaw believes there’s some leading and some following to be done on both sides. Consumers have been a vocal catalyst for change in demanding for more transparent supply chains in apparel through movements like Fashion Revolution’s #whomademyclothes campaign, but there’s still plenty of shoppers fueling the rise of fast fashion.

“There’s research been done that people want it but when the price isn’t low, they don’t follow through on their values,” he says. “We can only offer an alternative for people who want to live out their values.”

“I think once people catch the excitement, the passion, the impact they can make from choosing to buy from a brand that lives out its values, hopefully more consumers will make the switch.”

Shaw says it makes sense from a values-based perspective for retailers to do their utmost to purge their supply chains of unethical activity.

“If you go back to why most businesses were started, it’s to do good.”

Profit is important for continuity, Shaw says, but before they were “weighed down and enslaved by the profit margin,” most businesses were founded upon original values which prioritised making a positive impact in the world.

“It’s about changing for good rather than [taking] a defensive, risk-management approach.”

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